is a public sale of a property whereby the property is sold to the highest bidder. If you buy a property at auction you cannot make the contract subject to any further conditions and there is no cooling offer period. There are laws that govern how auctions are to be conducted.
Adjustments are an apportionment of the rates, taxes and outgoings between the Vendor and Purchaser. Adjustments are made to ensure that the Vendor pays their portion as to the date of settlement (or such other date detailed in the Contract) and then the Purchaser assumes liability for the remaining portion.
Adjustments ensure that any arrears and/or outstanding interest has been or will be paid by the Vendor.
Adjustments also ensure that the Vendor allows for the cost of any fees for discharging their mortgage or any caveats over the Title.
Adjustments are then totalled and will be deducted or added to the amount due at settlement (which is the Price, less the Deposit monies already paid). This is called the Statement of Adjustment and Settlement Statement, and it will show the parties the amount due to be paid at settlement.
Authority to sell
also known as Authority, is a legally binding document signed by the Vendor and the agent which details the agreement of the sale namely, giving the agent legal permission to sell the property, commission and advertising costs, auction terms etc.
describes a cheque that is issued by a bank and guaranteed by the bank as it is drawn on the bank’s own funds and signed by an authorised representative of the bank. Bank cheque fees apply and vary between institutions, however they are generally $15 to $20 per bank cheque.
A legal document pursuant to the Domestic Building Contracts Act 1995 that forms an agreement between the builder and consumer about home building, renovating, extensions and repairs.
is an inspection of the building and or property by a qualified building inspector who provides a professional judgment about whether a building meets building requirements.
Written approval from a registered building surveyor that shows the plans fit in with the building regulations. This permit is required before works can be commenced.
A short-term loan (about six to 12 months) used to fill the time gap between buying another property and either selling the one you own or obtaining a long-term loan. This type of borrowing is usually at a higher interest rate.
also known buyer’s agent, is an estate agent acting solely for the buyer by sourcing suitable properties and representing the buyer throughout the buying process.
In law, conveyancing is the transfer of legal title of property from one person to another and commonly referred to as selling a property or purchasing a property. It is highly recommended that conveyancing is undertaken by a lawyer or conveyancer as there is an established process.
Cooling off period
If you are purchasing a property privately you have a cooling off period of 3 days subject to certain conditions. Therefore, if the conditions are applicable to you, you can cancel the Contract of Sale within the 3 days by written notice to the Vendor. The cooling off period is applicable if you purchase a property at auction.
An agreement creating an obligation on the titleholder of a property to do or refrain from doing something. For example, a restrictive covenant could state that no more than one dwelling may be built on the land.
Contract of sale
also referred to as contract, is a legal document prepared on behalf of the Vendor, usually with the aid of a solicitor or a conveyancer, outlining the details of the sale. The contract of sale is legally binding when signed by both parties.
Certificate of occupancy
also known as occupancy permit, is a document that signifies that a building surveyor has approved the building work as being suitable for occupation and is compliant with the Building Act and other building regulations.
It is an offence to occupy a new building, including a home or apartment without an occupancy permit.
Certificate of title
also known as title is the document showing who owns the property, the size of the land and whether there are any limitations on the title such as mortgages, easements or encumbrances. A certificate of title can now be electronic.
Areas of a property used by and belonging jointly to all owners of a property. The Owners Corporation will govern the use of the property. Common property is found in apartment blocks or multi-dwelling complexes.
Property zoned and used as office buildings, shops and retail premises.
Certificate of Final Inspection
is a document issued by the building surveyor after final inspection stating that the build or the works subject to the permit issued by council is compliant and completed.
Capital gains tax
a government imposed tax that is applicable to Vendors only, whereby tax is payable on profit from the sale of certain types of property. Your principle place of residence is excluded from capital gains tax.
A caveat is a document that any person with a legal interest in a property can lodge at Land Use Victoria. After recording, a caveat note appears on the title giving anyone with interest notice that a third party claims rights over the property.
A caveat has the effect of prohibiting the registration of a land interest dealing meaning that the property can not be transferred and settlement cannot occur until the caveat is withdrawn, removed, lapses or is cancelled.
Any property with a caveat registered on title needs to be brought to the attention of a lawyer.
this a legal principle which translates to ‘buyer beware.’ The buyer is responsible for checking the quality and suitability of the property before a purchase is made.
A percentage of the purchase price paid by the buyer when contracts are signed. It is usually 10 per cent. The deposit must be held in a trust account by an estate agency, by the seller’s solicitor or conveyancer or jointly in a trust account by the seller and buyer.
money paid out by us to obtain information about the property. The cost of Disbursements will differ depending if you are a seller or a buyer and usually include title search, certificates and settlement agents.
Domestic building insurance
Previously known as builders warranty insurance. Domestic building insurance taken out by the domestic builder for works over $16,000 (except for tradespeople who do not require registration where works cover only one trade).
Domestic building insurance only covers you if your builder has died, is insolvent or has disappeared. In these cases it covers structural defects for six years and non-structural defects for two years. The builder must be eligible for domestic building insurance to be registered. Your builder should provide you with a certificate of currency for an insurance policy that applies to work on your home.
is a section of land registered on your property title, which gives someone the right to use the land for a specific purpose even though they are not the land owner. A right held by one person to make use of the land of another. Drainage and sewerage pipes are examples.
Early release of deposit
Upon a Contract of Sale being entered into, a deposit is paid. The vendor cannot access the deposit unless they serve a Section 27 Statement on the purchaser.
The Section 27 Statement has numerous requirements that must be adhered too, and if all the requirements are to the Purchaser’s satisfaction the deposit can be released. Note the Purchaser has 28 days to consent.
Legal advice is recommended prior to agreeing to a early release of deposit.
Titles in Victoria were originally paper titles. They are now being converted to electronic titles held by the Land Titles Office.
Having ‘equity in your own house’ refers to the difference between the market value of a property and what is still owing on a mortgage. This will increase as the loan is repaid or as the property’s market value increases.
Estimated selling price
The price an estate agent estimates a property will attract. It must be recorded on the authority to sell either as a single figure or as a range where the difference between the top and bottom figures does not exceed 10 per cent. For example: $400,000 to $440,000.
First home owners grant (FHOG)
A scheme for first home owners. Legal advice should be sought to see if you are eligible.
Foreign investment review board
An Australian Government entity that reviews foreign investment proposals and advises Government on foreign investment policy.
Items that are attached to the property and cannot be removed without causing damage to the property such as bathroom suites, built-in wardrobes and kitchen stoves. They are usually included in the sale such as basins, toilets, baths, built-in wardrobes and kitchen stoves that are attached to the property and cannot be removed without causing damage.
Items that can be removed without damaging the property such as garden ornaments, lighting and air conditioners. They must be listed in the contract of sale if the buyer wants them to remain with the property. for example garden ornaments, lighting or air conditioners which can be removed without damaging the property.
General Law title
also referred to as the old system title. It is the original system of land titles. A General Law title is comprised of all the documents that show a property’s complete historical record of title ownership. For the title to be ‘clear’, it must be traceable without a break up to and including the current ownership. Such a title must now be converted to a [‘Torrens title’] when such a property title is resold.
Goods and Services Tax (GST)
A consumption tax of 10 per cent levied on the final consumer of the goods or services. The supplier of the transaction is responsible for collecting the GST and sending it to the Australian Taxation Office (ATO).
A person who undertakes to fulfil a contract if the person or entity who signs the contract to purchase is unable to do so. This is required when a property is purchased by a company.
Property zoned and used for factories and warehouses.
Interest only loan
Throughout the term of the loan, only the interest is paid off. The loan itself (the principal) is repaid at the end of the time limit of the loan.
also known as joint proprietor is the form of ownership where two or more people purchase a property in equal shares. If one dies, their share of the property passes to the surviving owner/s.
An institution or person who lends funds in return for interest accruing on the lent amount.
is a government imposed tax you pay when the total value of all the Victorian property you own as at 31 December, minus exempt land such as your home, is equal to or exceeds the threshold of $250,000 each calendar year.
A written contract giving the lender of finance certain rights over specific property. For example, the house bought by the borrower is used as security for the loan.
also known as lender. An organisation lending money to a borrower by a mortgage agreement.
also known borrower. A person taking out a mortgage on a property they are buying. The property is assigned to the lender as security for the loan.
if the borrower defaults, the lender can seek to recover the debt by selling the property that was the security for the loan under the mortgage.
A process whereby the purchaser named on the Contract of Sale nominates or elects an alternate party to purchase the property. Legal advice is required as certain forms are to be completed.
Notice of acquisition
A notice advising relevant government institutions of a new acquisition of land.
Notice of disposition
A notice advising relevant government institutions of a property being sold.
Formerly known as a body corporate. An owners corporation has the collective ownership of the common area in a subdivision of land or buildings. It is responsible for the administration, upkeep and insurance of the common area shared by all the owners (the common property).
Someone who carries out building on his/her property. Owner builders are not in the business of building. An owner builder must obtain a certificate of consent from the Building Practitioners Board in order to obtain a building permit to carry out domestic building work valued over $12,000.
Purchasing off the plan involves buying a property before it has been built. Such purchases are usually based on the architect’s plans and models.
Issued by the building surveyor after final inspection of the home; it shows that the building is safe and suitable for occupation. This is essential for the future sale of the home. An occupancy permit does not necessarily mean that all building work is finished: there may still be associated works in the contract, such as paving and landscaping, to be completed. You are not required to make your final payment until all work is complete, despite being given an occupancy permit.
Plan of subdivision
A Plan that describes the land.
The circumstance where a property for auction is not sold, usually because it has not reached the seller’s reserve price.
If the seller has agreed to consider pre-auction offers, you can make an offer through an agent prior to an auction. Your offer will usually be in the form of a signed contract and the process of negotiation is the same as buying by private sale. If your offer is accepted less than three clear business days before the auction date, you do not get a cooling-off period.
A permit obtained from the local council that relates to the zoning and use and development of land (for example, residential or commercial). This is not always required but if it is, it must be obtained before you can be given a building permit.
Property zoned and used for dwellings such as houses, flats and apartments.
Property zoned for non-urban uses, including farmland and bush blocks.
also referred to as a Vendors Statement. It is a document that the Vendor must provide pursuant to the Sale of Land Act 1962, to the buyer advising of restrictions such as covenants and easements, outgoings such as rates and any other notices such as a compulsory acquisition.
Each unit in a block or multi-unit complex is individually owned by the resident. In addition, all the owners in the building or complex have shared ownership of the common property, which is managed by an owners corporation.
Each unit is owned by the resident, who also owns shares in a service company, established under the Commonwealth Corporations Act 2001. The service company owns and manages the common property in the multi-unit block or complex.
otherwise known as land transfer duty, is a state government tax, based on the sale price of a property, paid by the buyer when property ownership is transferred. Also known as duty.
also known as completion is when ownership of a property passes from the seller to the buyer and the balance of the sale price is paid to the seller.
Divisions by a land owner, of all or part of a parcel of land, into separate allotments (or sections), each with a separate title, in accordance with a ‘plan of subdivision’ approved by the planning authority.
Sale of Land Act
is legislation that governs the sale of property in Victoria and requires those who sell land in Victoria to disclose certain information through the provision of a vendor statement to a purchaser.
Transfer of land
A legal document usually drafting by a lawyer or a conveyancer pursuant to the Transfer of Land Act, that records the change of ownership of a property from the seller to the buyer.
also known as Certificate of Title, is a legal document identifying who has a right to the ownership of a property. This may be in electronic format.
Also known as a vendor’s terms contract, when a loan is supplied by the vendor rather than by an established lender. Legal advice must be sought for these arrangements as there are further legislative requirements that a distinct to a normal conveyancing transaction.
A system of title by registration governed by the Transfer of Land Act in which the majority of property in Victoria is governed by.
Tenants in common
A form of ownership of a property when each person owns a share of the property, equally or unequally. On the death of one owner, the deceased’s share passes pursuant to their Will.
also known as section 32. It is a document that the vendor must provide pursuant to the Sale of Land Act 1962, to the buyer advising of restrictions such as covenants and easements, outgoings such as rates and any other notices such as a compulsory acquisition.
also known as the seller. This is the term given to the owner of the property.
A bid made on behalf of the vendor. Vendor bids can only be made by the auctioneer and only when the auction rules allow it.
The permissible uses of an area of land as stipulated by the local council.